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€-Vision

Jean-Claude Juncker’s 2017 State of the European Union (SOTEU) speech was marked, particularly compared with last year’s offering, by a renewed sense of optimism, but also by the urgency of serious institutional reform.

The Commission President covered a wide range of issues and challenges. The overall thrust of his message is that the EU now has the wind in its sails and must seize the opportunity to push ahead, taking further steps to underpin the integration process. That the wind has changed tack is evidenced by the defeat, for now at least, of the populist surge, the slo-mo train-wreck that is Brexit – which has revealed much anti-European rhetoric as simple untruths, and brought home the advantages of close economic integration – and not least the steadily improving economic situation, which has now broadened to many countries badly mauled by the crisis. Unemployment, as Juncker noted, is at a 9-year low.

Perhaps aware of the criticism that the EU is seen as too technocratic and fails to inspire emotions, the Commission President did emotion with a capital E, intertwining personal reminiscences with appeals to values including equality, freedom, the rule of law and transparency.

The finding by the EU Commission that Apple should return €13 billion (plus interest) in unpaid taxes because they constitute illegal state aid has raised a number of interesting and important issues that go beyond the specific case (see here and here for earlier commentary). One of these is that the Irish government is in a pickle. But worry not: there is a simple solution.

Apple is being obliged to pay back taxes. It is logical that it is unhappy about this and will appeal. On the other hand, it is important to realise that the Commission has not said that the Irish government is entitled to claim unpaid taxes from a major corporation, but that it is obliged to do so. On the face of it, even leaving aside interest, the €13 bn would be a very nice fiscal windfall (roughly equal to annual health spending) for a country whose public finances were battered by the financial crisis. Yet Ireland will also appeal the ruling. Not doing so would, clearly, imply an admission of guilt: the tax deals reached by previous governments with Apple – and by implication with other global corporations – would be brandmarked and the country would suffer a serious reputational loss.